Income tax rate in India to individuals
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At present the peak rate of income tax on the income of individuals is 30% + various cess depending upon the total taxable income which will go upto as high as 18% on the income tax amount of the individuals.
The peak rate of income tax was reduced from 40% to 30% during the year 1996 i.e about 22 years back and there is no downward revision of the same rather indirectly with various cess, it has moved up.
During the budget of the year 2016 -17 the income tax on SMEs and companies with turnover upto 50 crores was reduced to 25% which benefit the finance minister had promised to extend to all the companies irrespective of their turnover or profits they make. In a typical example of Reliance Industries Ltd., who make more than 50000 crores of cash profit also pays 25% income tax from the financial year 2018-2019 if the same is made applicable to all companies as promised by the finance minister in his budget speech of the year 2017.
I had never seen in the past where the companies pay lesser income tax than the individuals. Individuals also contribute to the nation building by way of paying income tax besides N number of various taxes and cess. The savings they make out of their earnings are also kept in bank or invested in stock markets or other productive assets and thus they also contribute their share in the nation building activities.
As such I am unable to understand as to why individuals are discriminated vis a vis companies which is not the case any where in the world till date. The government aspirations are to make Indian economy and India globally competitive. As such any tax reforms should be first made applicable and beneficial to individuals and only after that corporates should be extended the same benefit. In fact corporates were paying more income tax than individuals which was made on par with the rate of income tax the individuals pay. With various concessions and the benefit of depreciation available as well as write off for bad loans virtually the corporates are paying less than the peak rate of income tax. Extending further benefit by way of reducing the income tax is definitely harsh on individuals and discriminatory in nature and favouritism in nature which is highly undesirable and highly unacceptable. As such government need to revisit the peak income tax slabs for individuals and reduce it to 22.5% from the present 30% + various cess.
We look forward for a right approach in terms of income tax to individuals and the given suggestion to reduce the peak income tax rate to individuals will be reduced in this year budget so that it will be always less than the applicable income tax rates to corporates of the country.
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